ECB launches blockchain payment service

The European Central Bank has launched a new blockchain-based payment service and will begin investing in digital securities. These moves represent a concerted push by the ECB to adapt its operations to the growing use of distributed ledger technology in wholesale financial markets.

According to a Reuters report, the ECB's new service is named Pontes. It enables banks and investors to settle transactions involving tokenised assets using central bank money in euros. The system is intended to provide an alternative to stablecoins and other privately issued digital money for settlement. The central bank sees potential for blockchain to make financial transactions faster and more efficient by combining different stages of an asset's lifecycle and enabling greater automation.

First users and operational details

Major financial institutions are among the first to join the platform. The initial group of participants completing onboarding includes Deutsche Bank, Santander, and the clearing house Clearstream. These institutions will be able to use Pontes from its launch.

The platform will operate with limited hours initially. It will be available from 8 a.m. To 4 p.m. Central European Time on business days. The ECB plans to expand the service's availability and its operating capabilities over time as adoption grows.

Direct investment in digital assets

In a related development, the ECB plans to allocate a portion of its own funds to blockchain-based securities. The central bank manages EUR 23 billion in own funds. It will invest a small part of this sum in highly rated, euro-denominated debt issued by public institutions that is tokenised on a blockchain.

This investment move is designed to give the ECB direct exposure to tokenised financial assets. It also allows the institution to gain practical, hands-on experience with blockchain-based markets. ECB Executive Board member Isabel Schnabel has previously argued for greater central bank involvement with this technology. She stated that increased use of blockchain could reduce dependence on privately operated digital alternatives.

Broader central bank exploration

The ECB is not operating in a vacuum. Other major central banks are also actively exploring blockchain applications for market infrastructure.

The Swiss National Bank is conducting Project Helvetia. This initiative explores the use of wholesale central bank digital money for settling securities transactions. Meanwhile, the Bank of England is testing blockchain-related applications through its Digital Securities Sandbox. This sandbox allows market participants and regulators to examine how digital technologies can be used in securities markets.

Separately, the ECB continues to develop a digital euro for consumer use. This project is part of broader efforts to strengthen Europe's payments infrastructure and reduce reliance on non-European payment networks. The central bank aims to launch the digital euro in 2029, adding a retail component to its wide-ranging exploration of digital forms of money.